As global trade tensions escalate and economic pressures mount, automotive retailers must adapt and be resilient in the face of economic shifts. In today’s episode of CBT Now, host Jim Fitzpatrick sits down with Brian Benstock, partner GM and VP at Paragon Honda and Paragon Acura, to discuss how tariffs, interest rates, and inventory concerns are impacting the retail automotive sector.
Benstock opens the conversation with a message of reassurance, echoing the sentiment that although current times may be uncertain, the industry will ultimately weather the storm. He expresses support for the president’s push toward fair trade, noting that while the immediate effects of tariffs may cause disruption, the long-term implications could be beneficial for the country’s economy and manufacturing base.
Although there’s currently more than three million vehicles sitting on dealership lots across the United States, Benstock points out that Honda’s day supply remains tighter than other brands. However, more than 70% of Honda vehicles sold in the U.S. are manufactured domestically, helping shield the brand from some of the harsher impacts of international tariffs. He emphasizes that the current policy focus should be on “fair trade” rather than just free trade and noted that several global leaders are recognizing the need for swift resolution, with dozens reportedly in contact with the White House.
He also touches on the shift in consumer behavior due to the tariff-related uncertainty. The industry pulled some demand forward in March, as buyers rushed to secure vehicles ahead of potential price hikes. He notes that manufacturers with over 100 days of inventory may actually benefit from temporary relief in supply disruptions.
Some automakers have pledged to absorb price increases or maintain current pricing, a strategic and customer-focused move. He praised brands like Ford for highlighting their U.S. manufacturing roots in recent advertising and questions why any manufacturer would openly announce a price increase during such a volatile period.
Benstock advocates for better public awareness around domestic manufacturing efforts by brands like Honda, which has been building cars in the U.S. since 1982. He explains that Honda typically refrains from boasting about its American footprint, but in light of ongoing trade tensions, it may be time for the automaker to be more vocal. American assembly by foreign manufacturers, like Honda and others, supports U.S. jobs and adds to national economic strength.
Turning to broader economic policy, he is direct in calling for a reduction in interest rates. High borrowing costs are harming consumers across the board—from car loans to mortgages—and hurting dealers who face soaring floor plan expenses. The speed at which rates are increasing, from around 2% to over 7%, are damaging, and he believes rate cuts would provide much-needed relief to Americans and the federal government alike.
Benstock expresses concern over the recent political reversal in support for Tesla, a brand once championed by environmental advocates but now facing criticism. He defends Tesla’s contribution to the industry and calls the backlash toward Elon Musk and Tesla workers misguided and harmful.
On the used car front, he warns that prices are rising again, with a 5–10% increase already visible in the market. He attributes this to a shortage of lease returns, particularly in the Northeast where leasing is more common. The COVID-era drop in leasing volume has resulted in fewer off-lease vehicles re-entering the market, and now, with potential declines in overseas imports, dealers face increased competition for a shrinking used inventory pool. He expects continued upward pressure on used car prices and a busy auction environment in the near future.
Benstock concludes the conversation with a message of hope, asserting that the optimist ultimately prevails. He encourages fellow dealers to adopt a positive outlook on the current situation, emphasizing that the car industry is the most resilient in the world.
"I think the tariffs and the approach that the president is taking will take time, but I do support our president. He needs to do what he needs to do to get the economy and the nation on track. Some of the measures he's putting in place are going to be long -term very good for the country." — Brian Benstock
